Large Institution Supervision Coordinating Committee
Under applicable law, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Board of Governors has the responsibility for the supervision of systemically important financial institutions, including large bank holding companies, the U.S. operations of certain foreign banking organizations, and nonbank financial companies that are designated by the Financial Stability Oversight Council (FSOC) for supervision by the Board of Governors. To fulfill this mandate and to reorient its supervisory program in response to the supervisory lessons learned from the financial crisis, the Federal Reserve created the Large Institution Supervision Coordinating Committee (LISCC) framework. The LISCC is a Federal Reserve System-wide committee, chaired by the director of the Board's Division of Banking Supervision and Regulation, that is tasked with overseeing the supervision of the largest, most systemically important financial institutions in the United States.
The LISCC is comprised of senior officers representing various functions at the Board and Reserve Banks, bringing an interdisciplinary and cross-firm perspective to the supervision of these large, systemically important financial institutions. This approach to the supervision of systemically important financial institutions fosters rigorous supervision of individual firms while formalizing the use of horizontal reviews and analyses of activities and risks across the portfolio. Further, the approach promotes the evaluation of systemic risks posed by the firms in the LISCC portfolio through the evaluation of macroeconomic and financial risks, and how those risks could affect individual firms and the financial system collectively. The LISCC focuses on understanding these risks and taking steps to materially increase the financial and operational resiliency of systemically important financial institutions to reduce the probability of, and cost associated with, their material financial distress or failure.
The LISCC's primary functions are to:
- Provide strategic and policy direction for supervisory activities across the Federal Reserve System,
- Continue to enhance the consistency and quality of supervision, and
- Incorporate systemic risk considerations into the supervision program.
The LISCC is designed to:
- Facilitate consideration of views from various disciplines, including research economists, market specialists, supervisors and others at the Board and Reserve Banks, and
- More effectively incorporate quantitative analysis into the supervisory process.
Firms in the LISCC portfolio are financial institutions that may pose elevated risks to U.S. financial stability and are supervised by the Federal Reserve.
Current LISCC Portfolio Firms
Bank of America Corporation
The Bank of New York Mellon Corporation
Credit Suisse Group AG
Deutsche Bank AG
The Goldman Sachs Group, Inc.
JP Morgan Chase & Co.
Prudential Financial, Inc.
State Street Corporation
Wells Fargo & Company
The list of firms in the LISCC portfolio may be modified based on a review of the systemic importance of financial institutions doing business in the United States.
The Federal Reserve takes into account a number of factors such as the size of the financial institutions, their interconnectedness, lack of readily available substitutes for the services they provide, their complexity, and their global (cross-jurisdictional) activities.
The Federal Reserve's general framework for supervising LISCC firms is focused on four priority areas:
- Capital adequacy and capital planning;
- Liquidity sufficiency and resiliency;
- Corporate governance (assessing the effectiveness of senior management and boards of directors); and
- Recovery and resolution planning.